I agree with JB that alot of times it's probably simpler in the long run just to rip out all the old plaster and drywall it instead, but I hate to see old plaster walls torn out unnecessarily... There is a charm to the old plaster walls, even with their (hopefully little) cracks and bumps and stuff. I have a 200-year old house and if all the walls were perfect, it wouldn't have half its charm. Having said that, of course it depends on how far gone the walls are. If it's totally shot, I'd replace with drywall without losing any sleep. If it's mostly sound plaster, hanging tight to the walls, I'd at least think about trying to patch them.
I have had a 3' X 3' patch of my dining room ceiling replaced with drywall, but after the guy applied a skim coat of (plaster/joint compound/spackle - - not sure which) on top of the drywall, it blends in with the rest of the ceiling. The nice part is you're not expected to be perfect if the whole house has plaster.
One other hint, use flat paint instead of semi-gloss; it makes the imperfections much less noticeable. Also, if you sponge-paint the walls or rag them, the variations in color (along with the imperfections of the wall) will give it depth and hide a multitude of sins.